Examples abound which highlight the fact that companies which have seen new business opportunities that EDI provided have immensely benefited from being among the first who utilized it to increase the efficiency of their operations (both intra and inter-organisational) as well as to extend the scope of their businesses. This is augmented by the prevailing feeling in business today that global cooperations are becoming more critical for gaining and maintaining the competitive edge. Today's trend toward increased global interdependencies between businesses requires modern electronic infrastructure to support these transactions.
It is now recognised that Internet adds a new dimension to the electronic commerce paradigm. It is envisaged that Internet's role in electronic commerce is twofold:
However, an important element of business dealings i.e. support for business contract operations appears to be still missing in the world of electronic commerce. This includes a support for general contracts but also more specific, business contracts. Such support should be based on sound legal, economic and business principles to be widely acceptable and employed.
In this paper we will attempt to take a step in this direction, in that we will identify important business activities and practices associated with contracting, with the aim to automate them to the largest possible extent and incorporate them into a supporting IT business architecture framework. We look at business contracts from economic, legal and business points of view and map these concepts onto a general IT architecture which can support electronic business contracting.
Our aim is to investigate the applicability of a more general business contract architectural framework, which we are currently developing, to the specifics of Internet environment. This architectural framework is being developed in the context of open distributed systems and is guided by the principle of conformance to the relevant de-facto and de jure standards.
Therefore, based on the observations how contracts operate in business world, we demonstrate how a set of basic concepts of a business contract architecture can be developed. Particular areas which will be addressed in the paper are: definition of a contract domain, contract negotiation, validation, monitoring and enforcement concepts. We will demonstrate how each of these concepts can be realised in an open distributed system and also in the context of the Internet.